The start of a new year invariably engenders contemplation around overall improvement on the part of both individuals and organizations. What they’re doing right, what they’re doing wrong and how they might enhance their overall performance seem to be on everyone’s minds as a new year gains momentum. As far as companies go, there are potentially many areas that an organization might bring under scrutiny in this light, things like efficiency and productivity often being chief among these.
One aspect that businesses are increasingly inclined to examine is their performance in the area of social responsibility. It may be a somewhat more introspective metric compared to those which directly affect a company’s bottom line, but it’s become one which more and more companies are taking seriously.
Some companies are well-known for their high levels of ethics and social responsibility, while others… well, not so much. Still others aren’t really on anyone’s radar in this regard. In today’s socially-conscious environment, more employees and customers are placing a high value on working for and spending their money with businesses that prioritize social responsibility than in years past. For these and other reasons that are important to their overall viability, many more companies are paying attention to their optics in the area of social responsibility, and are seeing the value in being better corporate citizens.
In this article, we’ll cover how companies can be more socially responsible, thereby enhancing their images and building their brands. We’ll also offer a few examples of companies that are known for their social responsibility. We’ll discuss concepts of social responsibility, statistics on socially-responsible companies, how organizations can foster socially-responsible policies and discuss the tangible benefits—one of these being the ability to attract and retain top-level talent.
What is Social Responsibility?
According to Business News Daily, corporate social responsibility (or CSR) is “a type of business self-regulation with the aim of being socially accountable.” There really is no one-size-fits-all approach or method to achieving this goal; largely it can depend on a lot of factors, such as the industry in which a company operates, its size, location(s), as well as others. Some organizations involve themselves in global initiatives to combat hunger, poverty or to positively contribute to preserving the environment. Others promote economic initiatives that directly support the communities in which they’re located.
According to Business.com, while CSR can involve all sorts of initiatives (e.g., adopting company-wide clean energy solutions or being proactive regarding labor laws and benefits), social responsibility efforts generally fall into four categories:
- Environmental responsibility—Efforts which impact the environment. This might include initiatives dedicated to combating climate change and pollution or promoting sustainability.
- Ethical responsibility—Ensuring ethics in their delivery of products and/or services, and how they conduct themselves with customers and their workforce. This has a very wide scope, and could include everything from refusing to source for products from countries that use child labor to promoting DEIB efforts in their workplaces.
- Philanthropic responsibility—Giving back to their communities and worthy causes. Supporting educational advancement and donating to charities are good examples of philanthropic responsibility.
- Economic responsibility—Engaging in efforts that uplift the economy in general. Supporting legislative initiatives that aid in fostering a healthy economy and access for all, including diverse groups are examples of economic responsibility.
Stats on Social Responsibility
A 2017 research study conducted by Cone Communications revealed that more than 60% of American consumers want businesses to help in driving social and environmental change rather than relying on government initiatives. In the study, 78% expressed a desire to have companies address important social justice issues. Almost 90% of the individuals surveyed said they would be likely to purchase products from companies that supported issues they care about—while nearly 75% said they would refuse to patronize a company if they learned that the company supported issues contrary to their own beliefs.
And consumers aren’t the only ones who are scrutinizing companies in this regard. For job seekers, things like a company’s sustainability strategy and commitment to social justice issues have become significant factors in where they choose to work.
As a result, today, more and more companies are establishing robust and comprehensive CSR programs. They see this as an opportunity to demonstrate their good corporate citizenship as well as protecting themselves from outsized risk by considering the entire social and environmental ecosystems in which they operate.
Tangible Benefits of CSR Policies
According to Forbes, a focus on social responsibility has never been more important for businesses, and doing so provides very real benefits for companies. As reflected in a 2020 article published by the magazine, the first and foremost benefit is that of improving customers’ perception of your brand. Due to the stiff competition that exists in the business world these days, it can be difficult for a company to differentiate itself from its competitors.
While there are different areas of differentiation through which an organization can make important distinctions between themselves and everyone else in their industry, social responsibility represents a significant one. Businesses that take the lead in social responsibility definitely set themselves apart in the eyes of customers.
A tangential but significant benefit of taking social responsibility seriously is that in doing so, a business can develop an additional platform to market and earn their audience’s attention. In addition to fulfilling its primary mission (whatever that happens to be), a company can position itself as a positive force in society. This means that whatever you’re doing in the area of social responsibility is noted apart from other efforts you’re making, and it helps to keep your company top of mind in the eyes of consumers.
Finally, the resources you put into raising awareness for important causes can have a cumulative effect with the public and across industries, further mobilizing individuals and organizations to recognize their importance.
Attracting and Retaining Employees
In this regard, it’s always important to remember that the prospective talent you’re trying to recruit are also consumers. It’s likely that long before they find themselves in a position where they’re considering employment with you, they’ve already formed the basis for an opinion of what sort of organization you are, and what you represent.
In other words, they’re going to be familiar with your brand—and to some extent, this will be the product of whatever CSR efforts you are or aren’t making.
These days, increasing numbers of job seekers apply to companies with an eye toward their CSR strategies. Companies that take CSR seriously are readily seen as compassionate and more likely to treat their people well. In light of this, it simply stands to reason that companies that are committed to improving conditions in their communities, society and the world are likely to attract more talent, and individuals who are of a conscientious mindset to start with. Efforts in social responsibility also facilitate better morale, and thus a more productive and positive work environment.Forbes also noted that in addition to enhancing the perception of consumers and prospective employees, CSR also fosters consumer loyalty and shows accountability to investors. These can pay off in everything from easing the way in entering new markets to securing new financing from banks or investors. In addition to contributing to the aforementioned cumulative effect of a company’s CSR efforts, all of these factors synergize to favorably enhance the organization’s brand in the long term.
A few businesses that have become known for their social responsibility efforts include:
OtterBox—Through their OtterCares Foundation, the manufacturer of OtterBox and LifeProof smartphone cases and tech accessories has invested in programs and projects that inspire and support America’s students. They’ve also been known for a long time in their local community for providing free school supplies to low-income kids.
Toms—The shoe manufacturer donates one-third of its net profits to charities that support healthcare and education. In 2020, the brand began directing all charitable donations to the Toms COVID-19 Global Giving Fund.
Coca-Cola—In 2010, Coca-Cola unveiled its 5by20 initiative, which was created to empower women globally. According to the company, “Through 5by20 programs around the world, we equip women entrepreneurs to overcome social and economic barriers by providing business skills training, access to financial services and assets, and connections with peers and mentors.”
Lego—To date, the household name toy brand has invested millions of dollars into addressing climate change and reducing waste. Their efforts have included using sustainable sources, reducing packaging materials and investing in alternative energy.
Starbucks—The coffee chain has become almost synonymous with CSR, publicly taking stands on a number of contentious social issues. Some years ago, Starbucks implemented a socially responsible hiring process to help diversify its workforce. This has been centered on their hiring more veterans, young people, and refugees.
It’s become evident that corporate social responsibility is integral to branding, and that companies’ CSR efforts carry weight with consumers and prospective employees alike. In order to establish and maintain a successful brand, retain customers and attract quality candidates, businesses must build trust with their audiences, and having sound CSR strategies can go a long way toward building that trust.